Need urgent answer and correct answer. The formula list given is also attached. Please need them as soon as possible and only correct ones with proper explanation.

Capital Asset Pricing Model (CAPM) E(R, )= R, + B, E(R. )-R, ] Modigliani and Miller Proposition I (no tax): V1 = Vu Proposition II (no tax): R = R. +(R. -R. ) Proposition I (with corporate tax): V, = V, + ID Proposition II (with corporate tax): R = R. + (R. - R. [1-I.) Miller (1977) VI =V + 1- (1- 7 1 - I. ) D 1-IEl _ _ _ _ _ Blur Ltd, a UK importer, expects to make a payment of 1.8m Australian dollars (A55) for sure in one year from now. Blur will need to pay for the A5 currency in sterling (E). Assume that the Australian dollar's spot exchange rate now is A$=O.56, the oneyear forward rate is A$=G.59, and the discount rate is zero. Blur may need to pay an additional A$3_1m one year from now if it agrees a deal with a new Australian supplier, also payable in one year from now. The probabiltty of this deal being agreed is 0.5. ll'the deal is not agreed (probability 0.5), Blur makes no payment to the new supplier. Suppose for parts (a) and (b) that the spot rate in one year is A$=0.58. 3} Assume Blur chooses to enter into a forward exchange contract for the maximum possible payment of Am. What actions will the rm take and what will be the value of its net payments in E, if in one year: {i} the new deal is agreed? {ii} the new deal is not agreed? What will be the expected value of Blur's net payment in 1? {5 marks) b} Assume now that Blur chooses to hedge the certain payment ofAs'l .8rn using a forward exchange contract, and the uncertain payment ofA$3_'tm using a call option with an exercise price of 0.57 and a premium of 0015 perAS Page a of a uL21looi'ir What will be the value of its net payments in E from this strategy, if in one year: {i} the new deal is agreed? [ii] the new deal is not agreed? What will be the expected value of Blur's net payment in ? {7 marks) o]: Suppose now that the spot exchange rate in one year is A$=0.62_ What will be the new expected values in E. of the strategies in parts (a) and (b)? Have they changed? Explain whyrwhy not. {1 marks} :1] Assume that Blur believes that the uncovered interest rate parity relationship determines the expected future 5th rate. How might the rm set up an alternative hedging strategy for a foreign currency payable? Specify the actions that would be taken. {150 words) {No calculations are required for this part orthe question.) {6 marks} {Total = 25 marks}